NEW YORK (TheStreet) -- Good day, traders!
1. First, let's look at the medical device company, DexCom. It focuses on the design, development and commercialization of continuous glucose monitoring systems.
DexCom traded up 7.1% on Wednesday, closing at $34.88 per share.
- Wednesday's range: $33.29 - $34.91
- 52-week range: $19.93 - $49.83
- Wednesday's volume: 1,108,091
- 3 month average volume: 997,972
DexCom looks good technically because it formed one of the best candlestick signals. On Tuesday, the chart formed a doji, which indicates indecision amongst investors, the on Wednesday, price action gapped up. This combination is called a "doji gap up," and is known as a very bullish signal. A doji gap down is a very bearish signal.
Consider this: With a doji, there is a battle between the bulls and bears, and neither wins, and the doiji is formed. Then the following day, the stock gaps up and forms a big bullish candle. This shows that the bulls won the battle and share price will continue to rise in the direction of the gap.
DexCom had a huge correction between March and May, and traded down 40%. For the last month shares have traded back up almost 18%, and yesterday's price action tapped the 50-day simple moving average, and the stock closed 1 penny below this average. Look for continued bullish trading today above the 50-day SMA and beyond. There is overhead resistance at $36.06, $38.73 and again at $41.96. I would target the 52-week high, but would be fine with a trade to the $41.96 level for 20% to the upside. I'd set my stop at $32.16 and stay long until there's a confirmed sell signal or a close below the t-line.
2. Next, let's look at Iamgold, which explores, develops and operates gold mines. The company also explores for silver, niobium and copper deposits.
IAG traded positively on Wednesday, closing up 1.5% at $3.46 per share.
- Wednesday's range: $3.35 - $3.62
- 52-week range: $3.00 - $7.08
- Wednesday's volume: 20,312,420
- 3 month average volume: 5,556,850
IAG is a rounded-bottom breakout chart pattern. I like this chart as it gapped up after a huge bullish day on Tuesday and Wednesday pulled back as investors took profits. This is an opportunity to get a better entry price, now that it's pulled back a bit, and still closed over the 50-day simple moving average. Look for an entry above the 50-day SMA and target the 200-day simple moving average for 20% to the upside. Set you stop at the t-line, which is at $3.25.
There is overhead resistance between the current price and the 200-day SMA, but nothing that compelling, so I would just stay long, let the trade work and let the trend work itself out. There is 20% upside potential, but don't be afraid to take your profits and run with 8%, 9%, 10%. That would still be a great trade. Stay long until you see a confirmed sell signal or a close below the t-line.
3. Now, let's look at Conn's. It operates as a specialty retailer of durable consumer goods and related services in Texas, Arizona, Louisiana, Oklahoma and New Mexico.
CONN traded lower on Wednesday, closing down 1.7% at $47.48 per share.
- Wednesday's range: $47.11 - $48.90
- 52-week range: $31.17 - $80.34
- Wednesday's volume: 759,476
- 3 month average volume: 1,248,210
CONN was a rounded-bottom breakout on April 15, then traded up and back, testing the patten, and was again a rounded-bottom breakout on May 22. I didn't want to recommend this trade before because earnings were approaching, and I never suggest holding over earnings. Now that positive earnings have been reported and there is a slight pullback, it's a perfect time for an entry.
Shares are still trying to fill the gap down that occurred February 20, a big gap down, so there was a lot of resistance to the upside. Now the gap down is almost closed, and the resistance is somewhat less relevant. I'd set my stop at the 20-day simple moving average at $43.94. Like with all rounded bottom breakouts, target the 200-day simple moving average first, which is almost 15% to the upside from yesterday's close. Not to say that the bullish move will stop at the 200, but I'd take some profits there. Stay long until you see a confirmed sell signal, or a close below the t-line.
Good luck traders!
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At the time of publication, the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.